Market Entry Strategies

1636 WordsJan 4, 20117 Pages
Market Entry Strategies Sam C. Okoroafo – Modes of Entering Foreign Markets Okoroafo produced an article detailing a four step strategic model that firms should take into account when deciding modes of entering foreign markets. The model consists of four steps: 1. Determine the feasible modes of operation (MOO) There are many modes of operation suggested by many different researchers; however, “Some countries may prohibit use of some MOOs for reasons related to achieving their economic objectives”. This is supported by the suggestion of barriers to entry or threat of new entrants outlined in Porter’s Five Forces model. This is a factor that should be seriously considered by any firm producing alcoholic beverages as there are more…show more content…
However, this method of market entry may be considered as the European firm will be new to the Australian market and will need some help in establishing their products and brand. Joint ventures When setting up joint ventures and alliances, there is a detailed formal agreement which outlines who is involved in the business, who owns the assets, the management and control of the business, and termination of the venture. This means that there is shared risk, shared knowledge and expertise and ultimately a competitive advantage if two firms are in partnership with each other. However this might mean that the competition is reduced and therefore Porter’s National Diamond framework that suggests that rivalry and competition strengthens a business’ national advantage is weaker. Strategic Alliances, mergers and Acquisitions A strategic alliance is defined in International business 5th edition (Rugman and Collinson) as “a business relationship in which two or more companies work together to achieve a collective advantage” The benefits of developing a strategic alliance for the European firm would be that they would be able to acquire knowledge of new markets and technology, develop closer links with their suppliers and customers and to reduce the pressure of competing with large competitors who are already established in the Australian market. If the European firm was to consider a

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